Consumer confidence declined in the last week of February to the lowest level in the year so far, according to Bloomberg’s Consumer Comfort Index, falling to 43.6 from 44.2 the week before.
The index’s measure of “is it a good time to spend?” had its lowest response in six weeks, falling 1.8 points, the most since the end of November, to 39.9 after staying steady the two weeks before. Confidence fell among all age groups except those 18 to 34.
Despite a rebounded economy, lower fuel prices, and lower unemployment, consumers remain wary of any signs of economic insecurity, including inflation. Prices on consumer goods excluding food and fuel rose 3% in January, the biggest rise since 2012.
Consumers remain somewhat tetchy about spending despite a rebounding economy, which has seen more or less steady upticks in employment and other measures for several quarters now. Even this Bloomberg index found that consumers’ views on the current state of the economy relaxed, to 35 from 35.5 the prior week, while the weekly personal-finances index went up to 56 from 55.5.
Yet confidence among full-time workers fell to a five-week low, while part-time employees were less pessimistic than a week earlier.
Bloomberg’s index measures consumer sentiment a week at time, a snapshot that has limited value considering its brevity. Still, its key measure is probably this one: Sentiment for Americans earning more than $50,000 a year climbed, while confidence of those making less was little changed.
The problem of stagnant wages is widely seen as a problem in the U.S. economy, an issue underscored by the Labor Department's jobs report released Friday, which saw nonfarm payrolls surge by 242,000 jobs in February and revised up for December and January by 30,000 more jobs, holding the unemployment rate at a healthy 4.9%. But a 3% average hourly wage decline, noted by the government as a calendar-induced computing fluke, was nevertheless hailed by many economists as a bad sign.
Several experts Retail Dive has spoken to on a variety of topics consistently point to the routing of the middle class as a key problem for retailers. Until the economy bounce reaches lower income consumers, the lingering trauma from the Great Recession may not dissipate enough to please retailers, at least those catering to lower- and middle-income shoppers.
“We’re the most over-stored country, and there are several overwhelming problems,” Howard Davidowitz, chairman of New York City-based retail consulting and investment banking firm Davidowitz & Associates Inc., told Retail Dive earlier this year regarding Kohl’s, a department store catering to the middle class. “People have less money and this economy isn’t helping. You cannot double your number of people in poverty in 10 years, build more stores, and not have some kind of gigantic shakeout. Kohl’s is slowing down because the middle class is getting killed.”